“Millennials Screwed” – Hardly

October 5th, 2015

I saw an eye catching headline this week entitled “Millennials Screwed”. I had to read the story since I am a big follower of demographics and their effects on the economy.  When one entire generation of eighty million Americans, referred to as the millennials (currently aged between 18 to 35 years old), is being thrown under the bus, I have to know more.  This and two other articles related to young adults, and their financial plight, struck a chord this week.

The millennials seem to have been written off very early in their lives.  It is well known that many in this generation entered the job markets at a less than ideal time.  15% of millennials are still living at home.  It is also true that this generation is saddled with record levels of student loan debt.  This is not exactly the platform for an optimistic future. Should it be a surprise that 47% of millennials feel they don’t expect to live as well as their parents?

Four of our team at NHCO are millennials.  Are these young people a reflection of national surveys?  All of our millennial employees tell me they feel their future is very bright so maybe they comprise the 53% of their generation who are more positive about the future.  Of course our group might be getting stronger support from their parents than is typical of their generation,  and we certainly believe they are much better qualified and more capable than most of their peers.  Whatever the reason, the millennials I know are happy, hard working and, dare I say it, optimistic.

One of the other articles was focused on the other end of the spectrum, and in particular on the transfer of wealth that will likely benefit the millennials.  My generation, the baby boomers, are currently in the process of inheriting an estimated $12 trillion in assets from our parents.  How will the Baby Boomers make use of this significant windfall?  The answer would be a shock to many.  They plan on growing it for the next generation.

A Boston College survey concluded that over the next 40 years, baby boomers will pass $59 trillion of their wealth to their children, the millennials.  What is interesting is that the single largest concern expressed by the current holders of this wealth is whether their kids will be in a position to handle the money.  Another recently published research report tracked 3,200 families from 1975 and 1995 to see how wealth was transferred generationally.  A whopping 70% of people that inherited wealth failed to pass it to the next generation.  The two major reasons cited for this failure was lack of communication within the family, and the tendency for heirs to be financially unprepared to receive the wealth.  Our firm is very focused on assisting families prepare for generational transfers of wealth. Maybe that is why the four millennials with whom I work are so optimistic.  They are truly working in a growth market, and during their careers they will have an enormous opportunity to help our clients meet the demands of both giving and receiving family wealth.

Carl Gambrell